Market Survey

By: g.p. gandhi

Growth Potential ofaGro-CheMiCalS india produces 16 per cent of the world’s foodgrains but uses less than 2 per cent of pesticides used in the world. there is thus a good potential for their growth.

should take special initiatives to popularise the use of insecticides, herbicides and fungicides to mini-mise the crop loss.

In 2006-07, India exported agro-chemicals of the order of Rs 2876 crore as against Rs 2791 crore in the previous year, registering a marginal growth of 3.05 per cent.

The Agro-chemical Policy Group (APG) is an apex industry body. The body is formed by three leading agro-chemical associations, namely, Crop Life India, Crop Care Foundation of India and the Pesticides Manufac-turers & Formulators Association of India.

Today, a major challenge to the agro-chemical industry is the spuri-ous products available in the market that not only eat away major chunk of the market but also exhibit more serious environmental hazards.

The Insecticides Act of 1968 and the Insecticides Rules of 1971 control pesticide use in India. The Central Insecticides Board (CIB) in Farida-bad (Haryana) is the regulatory body. It ensures that the nation gets right and safe products to control pests, diseases and weeds without harming consumers and environment.

The industry is regulated by two ministries. While the Department of Chemicals and Petrochemicals under Ministry of Chemicals and Fertilisers promotes production of pesticides, the Ministry of Agriculture and Co-operation monitors the quality and supply of pesticides.

United Phosphorous and Excel Industries are the major players in manufacturing and exporting a wide range of agro chemicals from the country.

recent developmentsASSOCHAM Study. India loses

around 20 per cent of its potential food crop produce every year, mainly because of the lack of safeguards. The loss last year was an estimated Rs 1.4 trillion. Only 20 per cent of 143 billion hectares of agriculture land is covered under crop protec-

R&D centre of Indian Council of Agricultural Research at Pedavegi, Andhra Pradesh

agro-chemicals/pesticides are used in agriculture to protect crops against destruction caused by insects, diseases, weeds,

rats, etc. Broadly, these refer to a wide range of insecticides, herbicides and fungicides.

India is the second largest pro-ducer of pesticides in Asia. The country is well equipped for manu-facturing speciality chemicals and reportedly produces 16 per cent of the world’s foodgrains but uses less than 2 per cent of pesticides used in

the world. There is thus a good po-tential for their growth.

According to the 37th Report of Standing Committee on Petroleum & Chemicals (2002) placed in Par-liament on December 20, 2002, the losses from pests, insects and dis-eases amount to approximately Rs 90,000 crore every year. The Com-mittee voiced its concern for taking effective steps to popularise the use of pesticides among farmers so as to save crop losses and increase produc-tion of foodgrains. The industry and the government, it further opines,

Market Survey

tion programme. The average pesti-cide use in India is the lowest in the

world at 0.48 kg per hectare against 10.7 kg in Japan and 4.5 kg in USA

mainly because of poor awareness among farmers and high cost of pes-

ticides. These obser-vations are made on the basis of a study recently conducted by ASSOCHAM and the Agro-Chemical Promotion Group.

The study has suggested launch of a national campaign to prevent crop losses caused by the pests, diseases and weeds as well as educating farmers on appropri-ate use of crop protec-tion measures. The study has also rec-ommended removal

of the high excise duty on agro-chemicals and related sectors to make pesticides and their crop protection technologies affordable to small farmers.

US agro-chemicals demand set to cross $8 billion. According to a re-port prepared by Freedo-nia Group, the demand for agro-chemicals in the US will increase at 1.3 per cent per annum to touch $8 bil-lion in 2008. The American agro-chemical market af-ter several ups and downs will begin to stabilise in the near future. According to the report, there will be a greater demand for her-bicides and it would be the main dominated product of the agricultural market. Herbicides will have a sub-stantial share of the mar-ket and increase at 1 per cent every year.

Seminar on pesti-cides. A seminar on ‘Role of Pesticides in Indian Agriculture,’ being organ-ised by Dhanuka Group, a leading manufacturer of pesticides, highlighted the

Table I

Categorywise india’s Exports of agro Chemicals during 2003-04 to 2006-07

(Rs crore)

Category 2003-04 2004-05 2005-06 2006-07 Percentgrowthin 2006-07over2005-06

Insecticides 1,456 1,494 2,191 2,050 (–) 6.44Fungicides 136 235 268 289 0.37Other similar products 109 95 148 279 88.51Herbicides, anti-sprouting products 42 64 179 253 41.34Disinfectants 1 2 4 6 50.00Total(allIndia) 1,746 1,901 2,791 2,876 3.05

Source: Compiled from the data of DGCI&S, Monthly Statistics of Foreign Trade of India, Volume 1, March 2004, 2005, 2006 and 2007 issues, Kolkata

Table II

india’s Exports of Major agro Chemicals during 2005-06 and 2006-07

(Rs crore)

Description 2005-06 2006-07 Percentgrowth

Other insecticides, not exactly specified 1,394.56 1,264.39 3.21Cipermethrin 412.45 447.22 8.43Other, fungicides, not exactly specified 216.16 279.08 29.11Other herbicides, anti-sprouting products 109.86 154.72 40.83Other similar products, not exactly specified 81.90 143.66 75.41Pesticides, not exactly specified 65.10 134.97 107.33Endosulphan technical 60.43 58.49 (–) 3.21Aluminium phosphide, e.g. phostoxin 39.47 49.13 24.47Aldrin 94.76 45.63 (–) 47.85Weedicies and weed rolling agents 0.16 43.62 Repellent for insects such as flies, mosquitoes 24.37 33.19 36.19DDT (excluding DDT of Heading 2903.63) 14.45 31.72 119.522:4 Dechlorophenoxy acetic aciuds and its esters 47.19 26.18 (–) 44.52Chlorophenyl, phenoxy acetic acid (MCPA) 21.13 25.92 29.11Dimethoate technical 17.96 23.70 31.96Ispprotrun 20.41 21.91 7.35DDVP (Dimethyl Dichloro Orovinyl Phosphate) 6.14 16.19 176.71Melthion 34.38 10.93 (–) 68.21Maneb 46.06 8.13 (–) 82.34Disinfectants 4.11 6.34 54.26Diaginal 13.25 13.91 4.98Total(allIndia) 2,790.69 2,875.50 3.04

Source: Compiled from the data of DGCI&S, Monthly Statistics of Foreign Trade of India, Volume 1, March 2006 and 2007 issues, Kolkata

Market Survey

role of pesticides in the Indian ag-riculture to avoid the hindrance in the process of food production and to stop losses of food grains caused by pests (around Rs 90,000 crore annu-ally). The seminar also called upon the farmers to manage the pests by following integrated pest manage-ment.

india’s exportsCategorywise. India’s exports of

agro-chemicals in 2006-07, as may be seen from Table I, registered a mar-ginal growth of 3.05 per cent over the previous year when the same hiked to Rs 2876 crore as against Rs 2791 crore. Exports during the period 2003-04 to 2006-07 witnessed continuously a rising trend from Rs 1746 crore in 2003-04 to Rs 1901 crore in 2004-05 and further to Rs 2791 crore and Rs 2976 crore in the subsequent years in 2005-06 and 2006-07, respectively.

Insecticides continue to dominate

exports of agro chemicals. In 2006-07, 68.88 per cent of the total exports of agro-chemi-cals from the country were accounted for by insecticides. However, their exports during the period dwin-dled by 6.44 per

cent when the same dropped to Rs 2050 crore as against Rs 2191 crore. On the other hand, all other catego-ries of agro-chemicals registered a rising trend.

India’s exports of major varieties of agro-chemicals during 2005-06

and 2006-07 are shown in Table II.Countrywise. Table III shows

that USA continues to hold the numero uno rank in the exports of agro-chemicals from India. However, exports to this market registered a negative growth of 12.64 per cent when the same declined to Rs 489.03 crore in year 2006-07 as against Rs 559.76 crore in year 2005-06. The other countries registering a steep decline during the period comprised Belgium (29.97 per cent), the Neth-erlands (24.68 per cent), France (17.03 per cent) and China (14.43 per cent).

On the other hand, the countries witnessing a steep growth included Korea Rep. (154.07 per cent), Japan (48.88 per cent), Indonesia (26.88 per cent), Brazil (26.52 per cent),

Table III

india’s Exports of agro-Chemicals to Major Countries during 2005-06 and 2006-07

(Rs crore)

Country 2005-06 2006-07 Percentgrowth

USA 559.76 489.03 (–) 12.64Netherlands 182.87 137.73 (–) 24.68Brazil 97.38 123.21 26.52France 129.97 107.84 (–) 17.03Argentina 90.44 105.28 16.41Japan 64.04 95.34 48.88UK 89.79 93.12 3.71Thailand 63.92 78.82 23.31Singapore 80.21 75.76 (–) 5.55Belgium 101.10 70.80 (–) 29.97China 83.07 68.64 (–) 14.43Germany 53.18 65.92 23.96Korea Rep. 23.58 59.91 154.07Indonesia 41.25 55.62 26.88Turkey 44.10 53.51 21.34Total(allIndia) 2,790.69 2,875.50 3.04

Source: Compiled from the data of DGCI&S, Monthly Statistics of Foreign Trade of India, Volume 1, March 2004, 2005, 2006 and 2007 issues, Kolkata

Pesticides

Market Survey

Table IV Category-wise india’s Exports of Major agro Chemicals to important Countries

during 2005-06 and 2006-07 (Rs crore)

Item/country 2005-06 2006-07 Percentgrowth Item/country 2005-06 2006-07 Percentgrowth

Source: Compiled from the data of DGCI&S, Monthly Statistics of Foreign Trade of India, Volume 1, March 2006 and 2007 issues, Kolkata

Other, fungicides, not exactly specified USA 39.53 32.59 (–) 17.56 Singapore 21.35 20.10 (–) 5.85 Vietnam 7.03 14.34 103.98 Turkey 3.30 14.34 334.55 Belgium 9.88 11.10 12.35 Indonesia 2.40 10.81 350.42 Bangladesh 5.78 9.16 58.48 Netherlands 14.09 8.98 (–) 36.27 Australia 2.17 8.47 290.32 Philippines 4.02 7.89 96.27 Total(incl.others) 216.16 279.08 29.11Otherherbicides,anti-sproutingproducts Nigeria 19.59 25.31 29.30 USA 19.65 12.39 (–) 36.95 France — 10.06 — South Africa 0.98 8.08 724.49 Israel 7.52 6.43 (–) 14.49 Belgium 3.90 6.12 56.92 Ethiopia — 5.58 — Japan 7.33 5.22 (–) 28.79 Korea Rep. 0.86 4.99 480.23 Italy 1.54 4.66 202.60 UK 3.58 4.49 25.42 Total(incl.others) 109.86 154.72 40.83Pesticides, not exactly specified Iran 0.31 12.84 4,041.94 Netherlands 3.65 7.72 111.51 Taiwan 1.14 4.56 300.00 Thailand 0.62 4.46 619.35 UK 0.42 5.90 1,304.76 Vietnam 0.80 4.51 463.75 Total(incl.others) 65.10 134.97 107.33Total(allIndia) 2,790.69 2,875.50 3.04

Other insecticides, not exactly specified

USA 357.39 240.85 32.61 Netherlands 98.40 86.67 11.92 Brazil 51.62 67.36 30.49 Japan 47.79 60.25 26.07 UK 58.84 55.33 (–) 5.97 Germany 27.13 53.12 95.79 China 49.72 50.64 1.85 France 82.04 47.71 41.85 Vietnam 25.21 47.55 88.62 Argentina 41.96 45.68 14.16 Belgium 51.62 39.06 (–) 24.33 Singapore 36.22 36.98 2.04 Indonesia 25.63 28.22 10.11 Korea Rep. 8.28 27.99 238.04 Turkey 23.22 22.73 (–) 2.11 Thailand 14.13 22.48 59.09 Total(incl.others) 1,394.56 1,264.39 3.21

Cipermethrin

USA 79.68 121.89 52.97 Argentina 27.44 28.63 4.34 Thailand 20.83 26.85 28.90 Vietnam 16.31 25.96 59.17 Nigeria 17.71 24.63 39.07 Brazil 15.68 20.93 33.48 Japan 6.53 20.06 207.20 Netherlands 40.11 16.91 (–) 57.84 Mexico 6.25 15.25 144.00 China 12.04 9.94 (–) 17.44 Australia 5.90 8.95 51.69 Indonesia 4.71 8.86 88.11 Korea Rep. 4.69 8.19 74.63 Total(incl.others) 412.45 447.22 8.43

Germany (23.96 per cent), Thai-land (23.31 per cent), Turkey (21.34 per cent) and Argentina (16.41 per cent).

Category-wise and country-wise India’s exports of major agro-chemi-cals in the years 2005-06 and 2006-

07 are shown in Tables IV and V.

export strategyAgro-chemicals offer a tremen-

dous potential for exports. For tap-ping the potential, there is a need to

make allout efforts to increase pro-duction of agro-chemicals keeping in view their quality and chalking out a suitable export strategy for boosting exports.

Some of the steps needed for in-creasing the production of quality

Market Survey

Table V

Country-wise india’s Exports of Major agro Chemicals during 2005-06 and 2006-07

(Rs crore)

Item 2005-06 2006-07 Percentgrowth

USA Other insecticides, not exactly specified 357.39 240.85 (–) 32.61 Cipermethrin 79.68 121.89 52.97 Pesticides, not exactly specified 12.86 42.42 230.04 Other, fungicides, not exactly specified 39.53 32.59 (–) 17.56 Aluminium phosphide, e.g. phostoxin 15.86 16.64 4.92 Other herbicides, anti-sprouting products 19.64 12.39 (–) 36.91 Aldrin 34.46 11.67 (–) 66.13 Repellent for insects such as flies, mosquitoes 0.05 5.87 11,640.00 Total(incl.others) 559.76 489.03 (–)12.56Netherlands Cipermethrin 40.11 16.91 (–) 57.84 Other, fungicides, not exactly specified 14.09 8.98 (–) 36.27 Pesticides, not exactly specified 3.65 7.72 111.51 Other herbicides, anti-sprouting products 6.00 3.45 (–) 42.50 Aluminium phosphide, e.g. phostoxin 1.29 2.16 67.44 DDVP (Dimethyl Dichloro Orovinyl Phosphate) — 1.43 — Total(incl.others) 182.87 137.73 (–)24.68Brazil Other insecticides, not exactly specified 61.83 67.36 8.94 Cipermethrin 15.68 20.93 33.48 Endosulphan technical 6.61 10.58 60.06 Other, fungicides, not exactly specified 9.88 8.99 (–) 9.01 Other similar products, not exactly specified 0.04 7.36 18,300.00 Dimethoate technical — 2.86 — Aldrin — 1.28 — Total(incl.others) 97.38 123.21 26.52France Other insecticides, not exactly specified 82.04 47.71 (–) 41.86 Ispprotrun 3.30 12.83 288.79 Aldrin 15.91 11.32 (–) 23.82 Other herbicides, anti-sprouting products — 10.06 — Other, fungicides, not exactly specified 3.20 5.75 79.69 Cipermethrin 12.94 5.69 (–) 56.03 Other similar products, not exactly specified 0.38 3.67 865.79 Dimethoate technical 6.23 3.11 (–) 50.08 Repellent for insects such as flies, mosquitoes 1.93 2.62 35.75 Pesticides, not exactly specified 0.85 1.90 123.53 Total(incl.others) 129.97 107.84 (–)17.03Argentina Other insecticides, not exactly specified 41.96 45.68 8.87 Cipermethrin 27.44 28.63 4.34 Endosulphan technical 12.65 13.04 3.08 Diaginal 0.19 5.05 2,557.89 Aluminium phosphide, e.g. phostoxin 1.35 3.64 169.63 Pesticides, not exactly specified 8.05 3.57 (–) 55.65 Total(incl.others) 90.44 105.28 16.41Total(allIndia) 2,790.69 2,875.50 3.04Source: Compiled from the data of DGCI&S, Monthly Statistics of Foreign Trade of India, Volume 1, March 2006 and 2007 issues, Kolkata

agro-chemicals are:1. Good manufacturing

practices should be made mandatory for pesticides manufacturing units to curb the menace of produc-ing spurious pesticides in the country.

2. Pesticides of any chemical are poisonous and should be used judiciously.

3. Need to make a con-certed effort by the indus-try to identify spurious pesticides and search the way out to overcome this problem.

4. Indian companies need to spend more on re-search and development as many MNCs are interested to market their products only.

5. Appointment of an agency like KPMG to study the Insecticides Act and suggest suitable measures to modify the same so as to ensure safety and qual-ity of pesticides supplied to farmers.

As regards promoting exports, there is need to initiate special steps. These inter alia include:

1. Conducting an over-seas market survey of se-lect countries by studying in detail their demand pat-tern and other procedural formalities by some institu-tion of national repute like Indian Institute of Foreign Trade

2. Conducting buyer-seller meets through the office of Chemicals & Allied Export Promotion Council

3. Greater participation in international trade fairs on agro chemicals

The author was formerly a research officer at the Indian Institute of Foreign Trade, New Delhi